IRS Can Now Send Private Collection Agents After You -- And Have Your Passport Revoked
Kelly Phillips Erb writes at Forbes that they snuck this into a transportation bill:
And as you would expect in a bill targeting highways and infrastructure, it also requires Internal Revenue Service (IRS) to use private debt collection companies.Wait? You didn't expect that? Of course not. Because tax policy has no business being stuffed into an already bloated bill (1,300+ pages) ostensibly focused on highways. But when has that ever stopped Congress before?
...Concerns were also raised in previous years about tactics used by private debt collectors. Year after year, the Federal Trade Commission receives more complaints about debt collectors than any other industry. In 2013 alone, there were over 200,000 complaints filed with respect to collection practices (you can see a list of collectors banned from the industry here).
Additional concerns about taxpayer privacy and fraud should not have been ignored. Last year, J. Russell George, the Inspector General Treasury Inspector General for Tax Administration (TIGTA), referred to a scheme where fraudsters called up taxpayers as "the largest scam of its kind that we have ever seen." TIGTA, IRS and Treasury have all warned taxpayers to be on guard against scammers, reminding them that "It's worth noting that the IRS doesn't generally initiate contact by phone." But private debt collectors do. Outsourcing collections will no doubt cause potential confusion for taxpayers and create new opportunities for scammers.
There are a number of reasons to be concerned about the consequences of outsourcing tax collections to private debt collections. When it was still in the early stages, the proposal was labeled "wrongheaded," "the wrong approach," "misguided," and "a recipe for taxpayer abuse." Nevertheless, Congress signed it into law, ordering IRS to " implement the proposal without delay."
The passport story is also in Forbes, by Robert W. Wood:
The law says the State Department can revoke, deny or limit passports for anyone the IRS certifies as having a seriously delinquent tax debt in an amount in excess of $50,000. Administrative details are scant. It could mean no new passport and no renewal. It could even mean the State Department will rescind existing passports....A $50,000 tax debt including interest and penalties is common, and the IRS files tax liens routinely. It's the IRS way of putting creditors on notice. The IRS can file a Notice of Federal Tax Lien after the IRS assesses the liability, sends a Notice and Demand for Payment, and you fail to pay in full within 10 days.
The right to travel has been recognized as fundamental, both between states and internationally. And although some restrictions have been upheld, it is not clear that this measure will pass the constitutional test if it is challenged. Speaking of challenge, it is not off-topic to mention FATCA, the Foreign Account Tax Compliance Act.
FATCA penalizes foreign banks that don't hand over American account holders. There are approximately eight million Americans living overseas, many of whom are still reeling from FATCA compliance problems.
Matt Welch in Reason on the horror that is FATCA.
Is this the America you want to be living in?
collec agents via @overlawyered
I'm a housewife, I earn no money except a few hundred bucks interest. My daughters are American citizens, too, and have little kiddie accounts where their grandparents occasionally drop a couple hundred bucks, and even we have to fill out forms and deal with the hassle.
That way the government looks like they're doing something about the zillionaires hiding their money.
We're not hiding our money, we live here and legit need checking accounts to, you know, pay our bills and and shop for groceries and shit.
They mess with the middle class to make them be able to say, "SEE! We're doing something about those tax evading fiends!" while they quietly let the zillionaires do what zillionaires are gonna do.
NicoleK at December 11, 2015 10:26 PM
By "hassle" I mean multiple meetings with bankers, and the expense of filing which is more than my annual income.
The way we have to report involves hours of going through bank statements trying to figure out what the highest balance that year was (it isn't reported so we have to look line by line, taking conversion rates into account, because the highest amount in CHF isn't necessarily what the highest dollar was), and stuff like that.
No, it's not the end of the world, but it's a penalty for being American. A few years ago, there was a line two years long to renounce citizenship. That has trickled off as everyone who wanted to renounce has done so.
NicoleK at December 11, 2015 10:30 PM
NicoleK, this is terrible.
Many Americans overseas cannot get or keep their bank accounts because of FATCA.
This is just wrong.
Amy Alkon at December 12, 2015 6:22 AM
Why hasn't Al Sharpton been dealt with.
Years ago a small small small business got behind on State taxes and the couple went to jail (ran instead of doing ???).
At the exact same time a local restaurant owned by a local prominent family owed $100K or more in taxes and was allowed to stay open while "working things out".
It's all a scam until Congress is forced to participate in every law passed. SS contributions, Obamacare (should be VA), no pensions (buy their own like we do), and so on.
Rant Rant Rant (too much coffee or too little - not sure which)
Bob in Texas at December 12, 2015 6:33 AM
Bob is right: we need a Constitutional amendment that states unequivocally that Congress shall be liable to all laws, rules, regulations and taxes and may not exempt themselves from any of it.
Especially insider trading. More than a few would be cooling their heels somewhere not DC for that.
I R A Darth Aggie at December 12, 2015 8:06 AM
Regarding borders, our elites appear to want the worst of all possible worlds: completely open borders for people coming in from who-knows-where to claim benefits, but at the same time, a Berlin Wall around the entire country to prevent citizens from leaving. I wonder how long it will be before a person wishing to emigrate will be forced to smuggle their assets out, in the style of escaping from a Latin American dictatorship.
Cousin Dave at December 14, 2015 8:41 AM
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